Our discussion question for this week:
Hot or Hype? Identify one failed innovation of the past 15 years, describe it, and give a brief analysis of why it failed. Do you think this was a common mode of failure?
Use the "Comment" function to leave a post.
ps. If you use a non-obvious name to post, please do send me an email to let me know what it is.
After eliciting the expertise of Google to refresh my memory on product flops in the past 15 years, I was reminded of all the media surrounding the Segway and how it didn't live up to that hype. The Segway is a self-balancing personal transportation device with two wheels that debuted in 2001. It did not succeed because many consumers found the device to be too expensive and multiple municipalities actually banned the device from sidewalks due to safety concerns.
ReplyDeleteIt seems the team that launched the Segway didn't conduct comprehensive market research. By launch, shouldn't they know whether or not a consumer would be willing to pay their price point? Additionally, it seems that all barriers were not identified. If the team was really innovative, they would have recognized that cities and towns would need to establish new regulation in order for the device to be adopted successfully, and they didn't consider those potential barriers. Due to their incomplete market research - in pricing and regulation - the product failed.
I do think incomplete market research is a common mode of failure. Organizations with cheerleaders or product enthusiasts, like famous inventor Dean Kamen with the Segway, forget that not all potential consumers are going to be as enthusiastic and adopt their product. Given the pressure that organizations undergo to achieve short time-to-market, it's not surprising that market research is often incomplete, so I suspect it will continue to be a common mode of failure as the intensity of competition in the marketplace continues to increase.
Honda launched its first hybrid car, Insight in 1999. The mileage was 84 mpg, the highest mileage in the mass-produced cars at that time. However, Insight didn’t sell well and finally discontinued in 2006. I think there were two reasons for the failure of Insight. First, the first generation Insight had an ugly appearance to achieve lower air-resistance. Second, Insight was 2-seater car to achieve lighter weight. People regarded Insight as an impractical car. After the discontinuance, Toyota Prius, a more practical car than Insight, was launched in 2000.
ReplyDeleteHonda brought back Insight in 2009, with a modest design and practical specification. At the beginning, the sales of Insight were favorable. But, after the third generation of Toyota Prius was launched, the sales of Insight got in a slump. One of the reasons is that Prius has a different type of hybrid system and higher mileage than Insight. But I think the appearance of the new Insight was very similar to the second generation of Prius, more importantly. People might not find the superiority of Insight and the identity of Honda.
The cause of the first failure was “too technology-oriented” development. The cause of the second failure was the “lost identity”. I think these two causes are common in other companies.
A recent invention that had the opportunity to revolutionize the kitchen was the "Slap Chop." If you are unfamiliar with this device, please reference:
ReplyDeletewww.slapchop.com.
The promotional video and materials make the slap chop seem like an easy to use, easy to clean, convenient new way to chop nearly anything that needs chopping (vegetables, fruit, meat, etc). What used to take 10-15 minutes can now be accomplished in just 3 seconds with a few slaps. The clean-up is as simple as washing the tool under the sink faucet.
I can speak from experience that this innovation is a failure, and the failure can be pinpointed to three main reasons. Bluntly, the device does not work. The blades within the slap chop are not sharp enough to truly chop the majority of food stuffs, and the result is more of a mush than nicely diced outputs. The slap chop used in the promotional video surely had samurai swords as blades. Also, for most avid cookers, I feel that there is a strong connection with owning and using a fine cutlery set. It has been my experience that avid cookers actually like chopping up the inputs to dishes and often take pride in being able to do it well. Finally, I think people are quickly turned off by the product when they watch the commercials purely as a result of the spokesman. Most people don't like infomercial personalities and Vince Shlomi is the creepiest of them all. In fact, he is so creepy, that he was assaulted by a hooker. For mug shots, please visit:
http://www.thesmokinggun.com/file/shamwow-guy-slap-chop-bust?page=0
In 2007, I was part of a member of the product team for Dewalt power tools and its new launch into security devices. Based on survey results that listed "job-site theft" as the #1 concern of contractors as well as data showing the high average annual expenses for a contractor relating to theft, Dewalt identified a need and began developing a product.
ReplyDeleteThe resulting product was a combination of a GPS location device, alarm, and cell phone. The idea being that you could place this on large pieces of equipment, generators, job-site boxes, and if a theft occurred, an alarm sensor would go off and it would immediately call the owner. From there, you could track the movement of the device via the internet if it was stolen, and ultimately recover the asset.
The product worked well, it satisfied a need, and the company stood behind this innovation. Demonstrations of the product garnered attention from customers and media; however, the product never saw any sales traction.
Several reasons created the failure. While the need existed, it required a lengthy sales process. A 30-minute demo was usually required as well as a trial period. Because it was so foreign to the customers, they harbored doubts until they were able to use it. At a $500 price point, this made for an expensive sales process for a small sale. With 10 sales reps nationally, it was difficult to quickly spread the word. We never were able to solve this problem.
Second, and just as importantly, this innovation attempted to change the buying habits of the customers. Traditionally they purchase a $300 drill, use it for several years, then buy a new one. This purchase required a $500 up front payment, followed by reoccuring monthly payments of $20 to cover the cell-phone fees. Customers associated this product with their tools, and were uncomfortable with the idea of being billed monthly.
Lastly, the distribution of this product was difficult as the accounts selling this product had to undergo extensive training. There was little incentive for an industrial supplies sales rep at one of our distributor's to learn and sell the product because of the small price tag compared to their average monthly sales. At the same time, because of the extensive sales process needed, this did not allow for it to be sold at a retail environment where the potential for higher volumes was present.
After a huge commitment from the company and several years of losses, Dewalt sold the product to the president of the division and the rest of us were left looking for other jobs within the organization.
http://www.dewaltmobilelock.com/main.asp
Innovation in Japanese supermarket industry. In Japan, there was no big-box supermarket in the past. The foreign companies such as Costco and Carrefour introduced extra large supermarkets in the beginning of 2000. They sell foods at lower price with volume discount. On the other hand, Japanese supermarkets sell foods higher price, small quantity but their foods are extremely fresh. After four years operation, Carrefour decided to retreat from the Japanese market because of their poor business performance in Japan.
ReplyDeleteThere are several reasons for this failure. Companies did not fully understand culture difference and lacked the analysis about the market and consumers’ buying behavior.
Americans tend to make a bulk purchase but Japanese don’t. They buy the foods nearly every day. Because they usually have one small fridge in small house and there is no space available for one gallon milk. They use local small supermarkets as their fridges. Therefore, Japanese consumers are not willing to buy many things at the same time and are less interested in price.
In addition, companies did not build the good relationship with local producers. They simply asked the producers the discount for bulk buying. They did not continuously buy the products from the same producers. Building the long-term relationship with local community is a key for success.
Do you remember Concord, the first and only supersonic transport that was used for regular commercial flights? This supersonic jetliner started services in 1976, and retired in 2003. It flew Mach 2.04 (1,350 mph) and connected New York with London and Paris in only about three and a half hours. Concord attracted widespread popularity as a symbol of “innovation” in airline industry. However, it was discontinued just within a year after its first commercial flight. What was wrong?
ReplyDeleteOne of the fatal mistakes was that the developers including British and French governments were out of touch with the times. Operators had to set the fare relatively high due to poor fuel efficiency, huge development cost, and small cabin capacity in opposition to a general trend of low-cost mass air transportation. In addition, Concord could be used for only limited route due to regulation of noise and requirement of special land equipments such as long runway. Furthermore, the oil shocks of the 1970s made airlines reluctant to buy Concord.
I would say those causes of failure are common in other companies. A product out of touch with the times never being commercially successful even though it has cutting-edge technologies. Innovation in technology may limit expansion of market because it often requires customers to fulfill some necessary conditions to use. No company can escape from an effect of unexpected historic event that harms the advantages of its product. Even though Concord was a truly innovative aircraft, it turned to be “Hype”, unfortunately.
I did a consulting gig with RJ Reynolds Tobacco. The reason they hired my firm was because they had a "new to world tobacco category" they wanted to launch and they needed to determine how these new products would fit into their supply chain. What, exactly, is a "new to world" category? They called it smokeless tobacco products: a set of three products made of tobacco that the user consumes in some way instead of smoking like a traditional cigarette. One has been relatively successful, called Camel Snus. In fact, Malborro and other companies have copied their product and I see it in gas stations across America. What happened to the other two products? Camel Sticks and Camel Orbs: http://tobaccoproducts.org/index.php/Camel_Sticks,_Camel_Orbs_and_Camel_Strips
ReplyDeleteThese products were largely scrutinized in the market upon launch because they resemble "candy" and conspiracy theorists claimed that Big Tobacco was just coming out with another ploy to draw in young smokers. They also missed the mark on listening to consumer needs. The consumer said "I can't smoke in public but I still need my nicctotene fix" and "I like using tobacco products because it makes me feel cool" and "I want something safer to consume than a cigarette". Hearing these messages, they came up with what are essentially more discreet tobacco products that have LESS tobacco in them and not as strong as a niccotene count. Albeit it is safer than smoking cigarettes, it is not cool and they did not taste good. They are also linked to higher correlations with mouth cancer. Product failure.
When I think of product failures, all the initial mp3 players come to mind. Even the term "mp3 player" draws a blank when thrown out in conversation. They are already considered "vintage." For example, there was the Diamond Rio PMP300, the Rave-MP 2100, the Creative Nomad, the Personal Jukebox PJB-100, and even Sony's Vaio Music Clip. Some of these products did well for a while. The Creative Nomad even sold 25 million, but has not endured the test of time.
ReplyDeleteThese ended up being just commodities that made a sound. Almost like disposable products. Then enter Apple's iPod. The rest is history.
A failure in innovation was satellite radio (Sirius and XM). Satellite radio was supposed to do for radio what cable did for television. However, this was not the case. With the use of satellites, Sirius had to put up a huge initial capital investment that they were not able to recover. This is due to the fact that they number of subscriptions each year were not nearly what the CEOs had expected. In general, people don't listen to as much radio as they once had, partly because these listeners prefer internet radio and downloads to just listening to the radio.
ReplyDeleteAccording to a NY Times article written in 2009, it looked like XM Sirius would have to file for bankruptcy, it would be the 2nd largest Chapter 11 that year, with $5 billion in assets. (http://dealbook.blogs.nytimes.com/2009/02/11/sirius-xm-bankruptcy-would-be-rare-failrure-for-karmazin/)
Another key component in the satellite radio failure is that the introduction of the iPod was released. iPods quickly became the fad and the must have among music lovers. People would have rather spent their money on iPods than satellite radio.
The disappointment that comes to my mind is the Google Wave. I was working for a digital agency when I first heard of this service and was eagerly waiting for its launch. I thought how cool would it be to be able to collaborate in real time with colleagues, partners and especially freelancers who are spread across the globe. It would definitely make my job easier and increase productivity of all the employees in the company.
ReplyDeleteBut, Google wave failed to deliver. One reason for its failure was lack of promoting the product by Google. Like Gmail, Google wave was an invite-only service. Another reason was the complexity of the product, maybe the concept and its utility wasn’t clear to the end user. Not much explanation on how people could get the best out of wave coupled with complex user interface was probably another reason. Last but not least could be the security concerns. Companies may be uncomfortable using Google wave as they might feel that the information can be collected and retained by Google.
RIP, Google Wave!
I think Motorola’s satellite phone is a good example. Initially an idea from a Motorola engineer, the concept was that by using a constellation of 66 satellites, subscribers would be allowed to make phone calls from any global location. The project was highly supported by the chairman of Motorola, thinking the phone would show the world Motorola’s technological prowess. A new company called Iridium was created by Motorola and the satellite communication service eventually started at a total cost of over $5 billion in 1998.
ReplyDeleteMotorola launched a $180 million advertising campaign to sell the phone but still, by April 1999, Iridium had only 10,000 subscribers. In August 1999 Iridium filed for bankruptcy. It was one of the 20 largest bankruptcies in U.S. history.
There are several reasons for Iridium’s failure. First, they didn’t fully understand how the competitors, the mobile phone producers, can meet this specific customer need in 10 years. Also, they didn’t doubt the general public acceptance of the product, ignoring this satellite phone was way too large and expensive. Moreover, the team was lack of focus on improving the product design.
Olestra... Yummy!
ReplyDeleteOlestra was the wave of the future in the snack food industry in the late 90's when P&G began introducing the fat substitute into their "WOW! brand" potato chips.
Customers were initially excited by the fat free, and delicious tasting chips that were made with Olestra and sales quickly soared to over $400M. Then the FDA stepped in and forced P&G (and Frito-Lay) to place warning labels onto their products stating, "This Product Contains Olestra. Olestra may cause abdominal cramping and loose stools. Olestra inhibits the absorption of some vitamins and other nutrients. Vitamins A, D, E, and K have been added."
"This condition (normally occurring only by excessive consumption in a short period of time) led to a condition known as "steatorrhea," or anal leakage."
Consequently, the negative association of Olestra and the WOW! chips forced the product off the market in the early 2000's.
At 10 years old, I thought that Crystal Pepsi was the absolute coolest thing around, something my friends in on the west coast had never seen and a real treat when I went to visit my family in Colorado. Apparently, Denver was a Crystal Pepsi test market, and although it enjoyed initial success in the mountains, it tanked fairly quickly when opened to the entire US market, thus ending my one life experience as a trendsetter.
ReplyDeleteHaving learned nothing from the New Coke experience, Pepsi created Crystal Pepsi in 1992 as a “clear alternative" to normal colas, trying to capture the customer’s desires for health, fitness, and purity. Pepsi’s marketing slogan "You've never seen a taste like this," tried to differentiate it, but even from this commercial suggests that the customer couldn’t quite figure out what Crystal Pepsi was: http://www.youtube.com/watch?v=kgiKmvb1pzY.
Although people claimed that it tasted like a lemon-lime product, it was apparently made of exactly the same ingredients, minus the brown coloring, of regular Pepsi. An executive at Pepsi noted that Crystal Pepsi had terrible execution, including concerns about the taste. Customers expected a clear drink to actually be lighter and have less calories, none of which Crystal Pepsi achieved. Because customers were so dissatisfied, Pepsi backed out to calling the product “Crystal from Pepsi” before eliminating it entirely.
I am looking at all the products that were launched and failed and I was thinking "What was a a non-product innovation that failed?" The first thing that comes to mind was the Selective Pricing policy of Amazon.
ReplyDeleteEvery retailer does selective pricing. For example, discount coupons discriminate between the high-value customer (who doesn't care for coupons) and the low value customer (who looks around for coupons and uses them). Amazon being the biggest online retailer, decided to apply the concept to their shoppers by using the purchase patterns stored in browser cookies.
The problem with price discrimination though is that it requires at least one of the two things:
1. The customers shouldn't know that they are being charged different prices
2. Even if the customers know, they should not care (Eg. I know that there are coupons out there that can give a discount on a pizza, but I don't care to look for one when I want to buy a pizza)
Amazon failed to account for these two factors in their selective pricing policy. It was easy for customers to figure out they were being price discriminated (just by opening two different browsers) and if you are buying online, you can post and blog and talk online. So news spread quickly.
Also, people buy online (especially at Amazon) to save money. So they care if they are being charged more. It wasn't a wonder that the customers didn't like the fact that they were being charged more/less based on their purchase patterns.
Amazon misjudged the customer behavior and their reaction, and as a result got slapped by the "Societal Constraints".
Who remembers the Ionic Toothbrush? Who has seen or heard about the product in the last 10 years? Chances are nobody.
ReplyDeleteWhat was the ionic toothbrush? The Ionic toothbrush was a clever marketing campaign that advertised an new type of toothbrush that helped remove plaque from your teeth by changing the polarity of the plaque on your teeth. By doing so, the plaque would simply repel itself from the teeth (the effect of placing two magnets together, positive to positive, or negative to negative).
Why did it fail? Could it be that it left a metallic taste in your mouth or that it was a radical change to introduce ionization as a method of hygiene? Could it have been that it simply didn’t work? Did enough people try it for the product to even catch on? I think I failed because a lot of people were already content with their current toothbrushes and the results they received. This was roughly the same time that motorized toothbrushes were coming out and simply seamed more feasible than changing the ion charges inside the mouth.
I think this is a common mode of failure. Often products and innovations don’t even stand a chance because competing products or ideas dominate the market. The ionic toothbrush was doomed from the beginning.
Sony Betamax had better picture quality than the competing VHS, and definitely (as one reviewer puts it) a cooler-sounding name. But it failed to capture the market and was out of competition within 2 years, as VHS became the de facto standard in home video recording.
ReplyDeleteAn oft-cited reason for failure is that the length of a Betamax "cassette" was 2 hours as opposed to the 3-hour VHS tape, which made it unsuitable for recording football games.
But I would argue that the main reason why Betamax failed was the fact that Sony remained the only company to promote all Betamax technology, while VHS was promoted as a standard and VHS-related products were sold by as many as 27 companies within a year. More competition, more innovation, more visibility for consumers - all of these facilitated the strengthening of the VHS platform.
I think this failure of companies to provide for / allow a sustaining infrastructure for their products is a pretty common mode of failure.
Apple Mac's relative failure vis-a-vis Microsoft (at least until the early 2000s) was a result of this problem too. Without an open platform for creating software and hardware like the PC, Apple didn't have as many diverse applications as Windows had.
But I don't think this can be generalized, because Apple has done a similar job with the iPod / iPhone / iTunes framework, and it has been a phenomenal success.
Back around 2001 Callaway Golf came out with a driver called the C4. It's head was comprised of nothing but graphite, which was an entirely new idea. The golf driver market had already made massive shifts in the 90s; going from persimmon heads, to steel, and then to titanium. The company claimed that the ball would jump off the face hotter with the C4 vs titanium, and thus would help you hit it farther.
ReplyDeleteThe idea ultimately failed though because performance in terms of distance did not improve, and the thing was just plain weird. It looked very different at address with it's black face, and the sound it made was totally new. I guess the golf world had finally adjusted to the new sound metal/titanium made in comparison to persimmon, but it wasn't ready for a new sound with graphite heads.
The recently released Shake Weight comes to mind. https://www.tryshakeweight.com/flare/next?tag=he|af&a_aid=OF&a_bid=3a77dccb&data1=495
ReplyDeleteThe Shake Weight in theory is designed to give women more toned arms by vibrating as you work out.
First of all the shake weight is singular. Yep, that's right, one. Why? Because rather than a regular work out you are supposed to grasp the vibrating bar with both arms and hold it for the duration of your workout as the bar does the work for you. This is similar to failed work out inventions of the past such as the ab belt which sent electrical pulses to your stomach so that one could avoid crunches. Fail.
Aside from the obvious marketing issues that the Shake weight has (see the SNL skit on the shake weight for the reference), the shake weight suffers from the fact that it is an imperfect replacement for the traditional dumb bell. Women often run with weights and do other cardio excercises and the shake weight is not practical for these purposes.
The shake weight also promises to cut down on work out time for your arms - cutting a 32 min workout into 6 minutes - but really what self respecting grown woman is going to hold a shaking bar in her hand for six minutes rather than do a good old fashioned workout?
If you notice the workout trend is moving to hardcore workouts - p90x, bootcamp, heck even yoga has gone hottttt. No one is taking the easy way out. Though this product may have worked in the lazy eighties - women with leotards, sweatbands and legwarmers barely sweating to the oldies it has no place in our time.
Before reading this post please first reference the following link:
ReplyDeletehttp://www.dailymail.co.uk/sciencetech/article-448474/Inventions-saw-light.html
You’ll find the Sun-Pod between the bra-warmer and “Meow-Lingual” feline interpreter.
Given the world’s ever growing population, the invention known as the sun-pod sounded like a good idea. Lightweight and portable, the sun-pod enclosed a given user in a thin, soundproof plastic shell. The sun-pod was designed to eliminate noise at the busiest of parks and beaches. While some would suggest headphones or earplugs the sun-pod’s designers wanted to eliminate noise without forcing the user to put anything in their ears. Their solution was a sound-proof capsule.
While the sun-pod kept noise out, it also kept heat in. The sun-pod was further flawed in that it removed the soothing sounds of nature that many seek at parks or beaches. Gone was the shrieking 5-year-old but gone too was the sound of waves breaking on the shore.
I still think the sun-pod’s designers were onto something. Americans, at least, are forever looking for ways to get farther away from each other. During a recent jog through a state-park, I noticed that each person I passed had an I-pod clipped to their side. Many of the most popular innovations in the last 15 years have sought to reduce the need for human interaction.
On Monday, we talked a lot about the barriers that kill good ideas. At least in the case of the sun-pod, a few more barriers would have kept a bad product from coming to market.
Windows Vista, when initially previewed, was met with enthusiasm. Its Aero UI represented a clear upgrade over XP in terms of its visual appeal and apparent ease of use. It promised to be more active in defending a user from spyware and malicious downloaded software. Microsoft promoted Vista as a major leap forward over the existing XP operating system which, while it enjoyed status as a consumer hit and easily the most advanced consumer OS Microsoft had thus far brought to market, was aging. In the face of steadily increasing competition from Apple, whose MacOS X operating system had been refined to a point where it was arguably superior to Windows XP, Microsoft felt it needed to act to update its aging software.
ReplyDeleteVista wasn't a complete commercial failure. It sold heavily, at least at first. The OS' failure was in its consumer reception. It badly tarnished Microsoft's reputation, which had been so bolstered by the highly successful launch of XP.
Why did it fail? Mismanaged expectations, for the most part. The Aero UI, so loudly touted by Microsoft, wouldn't run on older machines that ran XP with ease. Additionally, while Vista did play a more active role in defending a user's machine against malicious software, most consumers found the constant interruptions as the OS asked if a user really wanted to do something (install an application, run a new application, etc.) to be irritating. Ultimately, Microsoft was reduced to trying to "fix" public perception through their bizarre "Mojave Experiment" promotional campaign (http://en.wikipedia.org/wiki/Mojave_Experiment).
The entire affair can be largely boiled down to a failure to accurately measure and manage consumer expectations and needs. Microsoft released an OS whose most immediately exciting new feature was a vastly overhauled UI, but a UI that would fail to run on a great many consumer's PCs. In hindsight, MS could have taken several actions to prevent this minor calamity. They could have managed consumer expectations in advance, instead of essentially (and perhaps inadvertently) misleading consumers to believe that their PC would run Aero without issue. They could have let XP exist as their primary OS and continue evolving it for a few more years -- the graphics capability required to run Aero is now almost ubiquitous.
“Wait a minute, Doc. Ah... Are you telling me that you built a time machine... out of a DeLorean?”
ReplyDelete“The way I see it, if you're gonna build a time machine into a car, why not do it with some style?”
He should have seen it coming. After all, Dr. Emmett Brown DID have a time machine.
While “Doc” is arguably the top [fake] innovator of all time, he failed to look behind the cool, stylish exterior to see what was on the inside of the car. The DeLorean Motor Company (DMC) was established with much fan fair and hype, but less than two years later when the company closed its doors, they had only produced a dismal 9,000 vehicles.
The car company faced many external factors, such as dealing with Northern Ireland affairs and high exchange rates, but it really came down to production decisions that ended up hurting them both from the manufacturer and consumer standpoints. The cars had an extremely high production cost, which even after they were off the line, still had to be “almost totally reassembled” in the United States. On top of this high production cost, the stainless steel body and “gullywing” doors each proved to be a horrible mess as most dealers and body shops could not easily or cheaply repair any damage. The cost of repairs for each car was up to $2,500, far beyond what a consumer wants to pay, especially given that DMC did not provide a warranty for the early vehicles.
And on top of their woes, the company faced four safety recalls within the two year period. Car & Driver magazine reported the DeLorean fell “abysmally short of any commercial standard of acceptability.”
Quality, financial responsibility, poor management and production decisions eventually lead to the downfall of this iconic vehicle.
Side note: I actually had the chance to ride in a DeLorean in middle school, and, I must say, it did not live up to the time machine hype that was thrust upon me in my youth. Besides the highly disappointing lack of a Flux Capacitor, the vehicle seemed clunky, cheap, and poorly made (even to a smitten 8th grader).
So maybe “Back To The Future” is not a good test of product viability – but I am still holding out hope on the hover board.
Sony Minidisc- I remember when I was about 12, after having gone through walkmans and portable CD players, the new thing were these Sony Minidisc players. You could transfer music from a CD to the small disc and it was a little bit smaller than a portable CD player. I remember going to the electronics store with my Mom and brother and the salesman convinced us that this was the "next big thing." They were $250/each. It took way too much effort to transfer music onto the discs and in the grand scheme, the size wasn't that much smaller than a portable CD player and was maybe even on par with a walkman. Soon thereafter, Napster became popular and the demand for a more user friendly portable music player resulted in the ipod. I think I used the mini disc player a handful of times...it seemed innovative at the time, but compared to Apple's ipod, it definitely is a failure. I'd like that $250 back...
ReplyDeleteSony's MiniDisc was one of the biggest failures in recent memory. The technology used ATRAC audio data compression with CD-quality recording, but ultimately, it is nothing more than a miniature version of compact discs with slightly more capacity and fit inside a plastic case.
ReplyDeleteMD players launched late 1992, just around the time when MP3 audio format was approved. It had the competitive advantage of anti-skip and gapless playback, but the timing was poor, and a simple change in media wasn't enough for mass adoption.
From cassette tapes to CDs, there was a distinct advantage with digital media, reduce in size, and increase in capacity. Most of these changes were dramatic enough for consumers to want to adopt. However, MDs were essentially just another form of CDs, and simply did not have the appeal to the consumers. Sony, as a premium brand, charged the MD player and cassettes at too high of a price without offering significant advantage.
Even if it had gained wider adoption, the solid state MP3 players took off only a few years after, so it would have been short-lived success. It is a common mistake, a short-sighted derivative innovation with bad timing and very little advantage ended up one of the biggest failed innovations in the past 15 years.
Although I am not very familiar with the Sony MiniDisc, Jake & Lexi's comments above reminded me of another failed innovation: the laser disc.
ReplyDeleteMy middle school librarian thought that our shiny new laser disc player was the coolest thing that she had ever seen. She demonstrated the pause-play-rewind and menu screens over and over for our viewing pleasure. Several of my parent's friends jumped on the bandwagon, purchasing laser disc players and turning around to deliver stern lectures regarding which portion of the disc to touch and which to avoid with our sticky fingers.
(In fact, I would hazard a guess that several of those individuals still have the laser disc players hidden away in attics or basements somewhere.)
Although the laser disc was not adopted across America and quickly faded into oblivion (though, per wikipedia, it was significantly more popular across 'affluent regions of Southeast Asia'), it did help to pave the way for the adoption of the compact disc and DVD.
Does this mean that the laser disc was not a failed innovation? Was merely an awkward (giant) placeholder for later progress?
P.S. As an aside, I also would argue that at least 75% of everything listed in the SkyMall is a failed innovation ...
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ReplyDeleteThe McDonald's Arch Deluxe. It is estimated that the company spent over $300 million on research, development and marketing.
ReplyDeleteIn the 1990s, McDonald's decided to expand from its kid-centric marketing and products and target adults. To do so they felt they needed menu items with more sophisticated ingredients like peppered bacon found in the Arch Deluxe, the flagship sandwich of the Deluxe line of sandwiches. The marketing campaign initially took an unconventional approach and consisted of kids stating in regards to the Arch Deluxe that they "didn't get it" or that it seemed "yucky", hoping to appeal to an older audience through this "indirect rebel advertising". It backfired with studies showing that the advertising was potentially even hurting the brand. Soon after McDonald's campaign shifted to Ronald McDonald golfing or going to a nightclub that would better identify with the target audience. However, the damage was already done and the line was discontinued.
The one distinct product that jumps out when you associate failure to innovation is Windows Vista. The product was a desperate copy of the Mac operating system and Microsoft did a bad job at that too. Microsoft had everything going for it with the windows 98, 2000, and the XP. Somewhere along the the line they slipped because of the following reasons:
ReplyDelete1. Security - they struggled to manage the security issues in the existing products and then tried to correct them adhoc in the Vista
2. Hardware requirements- the ram requirements were more than most systems had at that time. This forced consumers to upgrade their computers even if they did not want to.
3. Organizational failure in managing scope - the severity of the security issues and in trying to keep the internal customers happy with the additional features; both lead to mismanagement of the development process and an emergency situation wherein the development version of Vista was scrapped and remade.
So I was watching the Giants game and did not finish writing about the MiniDisc or refresh the page until Lexi already posted it, so here's another failed innovation...
ReplyDeleteMicrosoft Kin Phones.
In April of 2010, Microsoft announced the launch of Microsoft Kin Phones, Kin One and Kin Two, specifically designed for social-media uses. Each Kin phone has a camera, multi-touch screen, looks and feels just like a smartphone. It was Microsoft's attempt to be "cool" in the smartphone market.
However, its limited features and functions doomed the Kin even before launch. It only had web browsing capabilities and social media widgets. The OS did not support external apps/games, offered no competitive advantage as ALL other smartphones on the market could do everything the Kin offered, and it required data plan, which would force the consumers to pay just as much as they would if they had a smartphone, and not get the same benefits. It seemed like Microsoft took a smartphone and made it dumber.
Microsoft was quick to recognize its mistakes, and pulled the phone from Verizon two months after launch. Microsoft will reintroduce the Kin phones with their Windows Phone 7 line-up, and hope to capture some of the smartphone market.
In a market dominated by the iPhone, Android, and Blackberry, Microsoft had no chance to compete with the Kin when it offered an inferior product. Even a big company like Microsoft made the mistake of trying to create a niche market that wasn't there, with a product that had no distinctive competitive advantage.
Crystal Pepsi – remember that? A marketing fad emerged in the early 90’s that equated clarity with purity in products. PepsiCo embraced this fad and created Crystal Pepsi, marketing the drink as a caffeine free “clear alternative” to other colas. The clearness of the drink was meant to drive mental associations with purity and health. The marketing slogan was, “You’ve never seen a taste like this.” The drink initially had a positive response in test markets, so PepsiCo decided to launch it and began selling it nationwide. A huge marketing campaign was also launched for the drink, and in its first year, Crystal Pepsi captured a full percentage point of U.S. soft drink sales. While initial sales were good, they quickly fell. Ultimately, in Pepsi’s effort to meet a demand for purity that they perceived from consumers, the company had created a drink that tasted nothing like Pepsi. Consumers wanted and expected it to taste like Pepsi; furthermore, the general review was that people did not know what it tasted like. Pepsi pulled the drink from the market. The company reworked the cola and launched another version of it simply called Crystal which fared even worse than Crystal Pepsi and was also pulled from the market.
ReplyDeleteEver heard of Google Wave? Probably not. This is one of those things from Google labs, kind of like Google Buzz (that annoying thing that pops up in Gmail) that never took off. It's basically a web application that is meant to help facilitate collaboration between many different people. It's kind of like IM or chat, with the ability to have anyone add pictures, video, maps, etc. You can invite people to "waves" on specific topics, and then use that forum as a way to make decisions.
ReplyDeleteI think this innovation failed because the market is already saturated with so many other forms of collaboration tools - we have cell phones, email, skype, blogs, chat rooms, and so many other ways to get in touch with people, that there really was not a major need for this product. That, in combination with it having to run on the new google chrome platform (which I'm sure scares some people) and the lack of real advertising that this product was available, has caused this innovation to fail. Usually, it seems, Google really generates positive responses with these sorts of things, but for those reasons, this one didn't really take off - or at least it hasn't in the circles that I run in.
Its called Spykes...a former product of Anheuser-Busch InBev....it was invented after the popularity of jager bombs and irish car bombs took over the alcohol market...it was the companies answer to increasing beer sales...a 12% alcohol malt beverage that was used to flavor a consumers beer. Flavors consisted of mango, lime, melon and chocolate flavors and is infused with caffeine as well as the herbs ginseng and guarana. The packaging came in what looked like a nail polish bottle and the liquid itself was very colorful...Society however was not ready for such a great innovation. Many critics claimed that the product was marketed towards kids and the societal pressures forced the brewery to pull Spykes off the shelf.
ReplyDeleteRemember the HD DVD vs. BluRay war? Well, I guess we all know now who won. One of the major product disappointments in the past decade was the HD-DVD. While it seemed to gain some momentum, it officially went off the market in 2008.
ReplyDeleteFrom its inception, the HD DVD was doing head-to-head battle with BluRay. HD DVD was spearheaded by Toshiba in the early 2000's and eventually led to a creation of the HD DVD Promotion Group, including NEC and Sanyo. BluRay techonology had a similar structure. The techonology of both formats was similar and both products began gaining mass attention and appeal.
But here lies the problem: consumers couldn't tell the difference. An average DVD purchaser doesn't really care how the DVD works, just that it looks better. What was really important was availability of the product. At the end of the day, BluRay just seemed to gain more partnerships with technology companies and, more importantly, from film studios releasing the movies. Unfortunately, someone had to lose the DVD battle - there couldn't be two formats. HD DVD just happened to lose.
In the early 2000’s, HD DVD was being developed simultaneously with Blu-Ray technology as the next format for home video. HD DVD was supported primarily by Toshiba, which sought to capitalize on the proven success of the DVD market. Today, HD DVD is dead, and Blu-Ray and DVD sales account for a substantial portion of studio’s movie revenue. For example, released on Sept 28th 2010, Iron Man 2 has already sold nearly 4 million units, representing $86.7 million in revenue on top of its already solid box office performance.
ReplyDeleteSo why did Blu-ray overtake HD DVD in the format war? To some degree, the war was decided by the commitment by certain studios and companies to one technology over the other. Toshiba, a manufacturer of consumer electronics, was the driving force behind HD DVD. It gained support initially by partnerships with Microsoft, HP, Intel, and Warner Brothers. Blu-ray, on the other hand, was driven by Sony, and gained the support of 20th Century Fox, Sony Pictures (naturally), Walt Disney Company, and Paramount. By 2005, even Warner Brothers would switch to join its peers in the support of Blu-ray technology.
HD DVD discs reached the market 3 months before Blu-ray, the production process was cheaper, and yet they failed to get studio support for the technology. From a studio perspective, their only concern was selling the most discs. They were not motivated by coordination with computer hardware or software companies. They were also against the HD DVD strategy of setting the initial disc price high. This pricing strategy resulted in slow adoption of HD DVD during those critical few months where they were the only new format available.
Lastly, Sony, as the developer of the Blu-ray technology, may have been a more believable developer of the technology because they had so much skin in the game with not only their Sony Pictures studio, but Sony Music and the PlayStation 3. They therefore had the foresight to secure exclusives with studios, and ensure the positioning of the new format across many technology platforms. Toshiba, on the other hand, was no doubt approaching the market from the perspective having already been selling dvd players, rather than the discs themselves.
Being one of the last to post, it was tricky to not repeat, so I went with an atypical innovation - TV progrmamming. One innovation that I remember failing most likely due to timing was a reality show called "Street Match", where the host walked around NYC with a bachelor and tried to match him/her up with someone that they were interested in purly based on walking by them in the streets. I think it was launched after the Real World which gave it potential, but "reality TV" had not yet gained mass appeal. Had this show launched around 2000, maybe before the first season of The Bachelor, then I think it would have had a chance at being successful show. Nowadays it seems like everything on TV is a reality show and they seem to get more ridiculous as the years go on. TV Programming overall as field, however, has many examples of innovations which appear to have potential, but once piloted or even launched, prove to not have the rankings to justify it's continuation.
ReplyDeleteThe Pontiac Aztek
ReplyDeleteReleased by Pontiac in 2001, the Aztek lasted only 4 years before being phased out, shortly before the entire Pontiac brand. During its lifetime the Aztek garnered heavy criticism for its exterior styling, cheap interior materials and failed innovations. However, this didn’t necessarily have to happen. When the Aztek concept was shown to the public in 1999, it received praise from the automotive press for its innovative technologies, futuristic styling and new positioning as a “crossover”.
Unfortunately, Pontiac decided that the concept’s exterior and interior materials were too expensive and replaced the majority of the innovative styling pieces and characteristic with cheap plastics – leading to an exterior styling that Time magazine characterized as one of the worst of all time. This was a major contributor to its failure, people value the look and styling of their cars and won’t buy something that they don’t want to be associated with or seen in.
Additional Pontiac became solely focused with positioning the Aztek for the generation X demographic and outdoor/adventure enthusiasts. As a result, they loaded the Aztek with additional features such as a built in air compressor, a center consol that doubled as a cooler and even an option package that included a tent and mattress. These not only added costs, but also were never valued by their target demographic as true outdoor enthusiasts buy their gear from trusted outdoor outfitters not their automobile manufacturer. Ultimately the Aztek failed to reach even break-even sales volume and was shelved in 2005. A victim of GM’s aggressive cost cutting, its poor styling and failed positioning.
I felt that the HD DVD was a good shot at the beginning. In fact, I was very into the high end entertainment so at that time I bought them both. The HD DVD could deliver the quality of entertainment experiences not readily distinguishable by human compared to the Blu Ray. However, this was really about an issue of business alliance. The Blu Ray garnered more support from the film makers and the device manufacturers so they won. Although by looking at the specifications per se the HD DVD did look mediocre, most consumers really cared about how many movies will be available on each type of machine; that said, such consumer desire was really more of a perception that the Blu Ray won by a successful marketing campaign. These factors combined gave the Blu Ray the success. HD DVD didn't fail as an innovation per se but as defeated by a better product packeaged by better business tactics.
ReplyDeleteI'm going with an innovation that was an attempt at re-branding. I know it's not a product innovation like many of the great posts above, but the attempt to change the current Gap logo (and its failure) was certainly an effort to innovate.
ReplyDeleteI had the opportunity to work for Gap Inc. Corporate prior to business school. The Gap brand is the flagship brand of Gap Inc, and included in the Gap family are Banana Republic, Old Navy, Piperlime and Athleta. One key component of Gap Inc's business strategy is a diverse portfolio of brands that each has different consumer segments and can pull one another through when one brand is going through a tough time.
Gap brand's brand has been faltering for a number of years, and many (internal stakeholders and the average shopper)believe it's part of an identity crisis, as Gap strives to be cool and affordable, yet not as cool as Banana Republic and not as affordable as Old Navy.
This month Gap brand launched a new logo in an attempt to reflect their evolution as a brand and retailed. The new logo was a large departure from the well known blue box with white lettering (see link below). At the same time Gap launched a twitter account to try to get a read on the public's reaction to the new logo. And the verdict? Awful! People hated it.
Gap reverted back to the original logo and the VP of corporate communications claimed that the new logo was "actually part of a crowdsourcing project" to garner ideas for a new logo and the one released was not in fact the final decision.
I think the innovation failed because there was nothing wrong with the new logo - it may in fact have been one of the best things Gap brand had going for it.
http://www.fastcodesign.com/1662452/gap-on-disastrous-new-logo-were-open-to-other-ideas
In 2008, I worked for a dental product publication that introduced new products to the dental industry. One of my largest clients was Olympus America, who was making their entrance into the dental industry with an innovative new product called the Crystaleye. The Crystaleye was a shade matching system that used Olympus’s digital imaging technology to take pictures of a patient’s tooth and provide a laboratory with the exact shading system to use in re-creating the tooth. This could be used for tooth restorations or in creating false teeth for implementation. It allowed dentists to ensure that the false teeth would identically match the surrounding teeth. The main selling point of the Crystaleye was that it could map the entire tooth and giving each section of the tooth a different shade to match (the center is slightly darker than the top, etc.). When the system was introduced to the industry, Olympus priced the unit at $7,500. Although doctors appreciated the new technology and believed it would bring a great service to their patients, the costs was more than the dentist was willing to pay. Many dentists insisted that they were able to “eyeball” the matching shade just as well as the Crystaleye could, so they were not willing to pay the high price for the technology. This seems to be a common mistake in introducing new products – Olympus did not listen to their potential customers’ needs and introduced a product that was innovative, but that people were not willing to pay a premium for.
ReplyDeleteThirsty Cat and Thirsty Dog—the bottled water for Pets may be a case in point. The water even boasted to be appropriate for human consumption and came in various flavors like Crispy Beef for dog and Tangy Fish for cat. As an owner of two dogs and two cats, I took the idea of serving my pets with expensive bottled water with artificial fish or beef to make them happy completely ridiculous. Added that these kinds of water are only served at specialized pet supplies. Instead of making ad hoc trip to purchase the costly water, why don’t I simply save the time to play with them and save the money to buy real beef and fish for them? I love my pets and I am definitely concerned about their health, but the idea does not seem impressive to me at all in improving my pets' living conditions.
ReplyDeleteThe reason why this innovative idea failed is that the idea itself is a loser at very first beginning. Without proper customer research and correct interpretation of customers’ true needs, the company launched something in which the targeted customers have no interest or don’t embrace.
Ketchup, the perfect condiment. Unless, of course, it isn't from Heinz or it isn't red.
ReplyDeleteBack in 1872 Henry Heinz invented the beloved recipe that is still used to this day. This recipe includes the perfect balance of all the tastes (sweet, salty, bitter, sour, and umami), according to a 2004 article "The Ketchup Conundrum" by Malcolm Gladwell. For over a century Heinz did not mess with this working formula and their market and market share grew.
In 2000, Heinz strayed from the path of proven success with "Green Ketchup" in an effort to attract more kids to the brand. According to a BBC article in July 2000 the new sauce was made from green tomatoes and feature added vitamin C. In a persistent effort to target tikes Heinz followed green ketchup with purple, blue, pink, orange and teal. Without changing the flavor just the appearance Heinz turned their winning product into a dud.
The change in the color was too much to handle for consumers and the product failed. They continued to buy the traditional red ketchup. I know that when I tried it I found it repulsive, even though I knew the flavor to be the same I could not get past the bright green color and the novelty quickly wore off. While there is a facebook group of 91 people in favor of green ketchup they were not enough to sustain the brand and it was discontinued. As sited in the BBC article Nigel Hemmington, head of Bournemouth University's School of Service Industries said "Consumers don't like to be confused." And that confusion is the source of the failure of Green Ketchup.
Remember Pets.com? Does a talking dog sock puppet refresh your memory? It should! Pets.com is now synonymous with the dot.com bust, and can also be thought of as a failed innovation. While Pets.com had lots of promise backed by huge brand recognition, its success was ultimately short-lived. Although Pets.com is not a product like most of the previous posts, its business model was innovative as it was the first online business-to-consumer company to sell strictly pet accessories and supplies.
ReplyDeleteContributing to most of Pets.com's failure was its unsustainable business model, with $147 million lost in the first nine months of 2000, not to mention the lack of market research done before its launch. According to Wikipedia, "Pets.com lacked a workable business plan and lost money on nearly every sale because, even before the cost of advertising, it was selling merchandise for approximately one-third the price it paid to obtain the products." Not only that but it's pretty amazing that no market research was conducted to confirm that a substantial market niche existed for Pets.com. It's no wonder why consumers didn't adopt this innovation! Most people think of their pets as their family, and not only that the process of buying online is too involved for purchases that you need almost everyday like pet food. Would you buy your kid's diapers online? Probably not! Just like my parents wouldn't buy Bailey's dog food and treats on the internet.
While Pets.com may not be in existence to this day, it will forever be remembered: known for its brilliant marketing (how genius was the talking sock puppet??) and massive innovative failure.
http://money.cnn.com/galleries/2010/technology/1003/gallery.dot_com_busts/index.html
One failed innovation in 2001 was the iSmell Personal Scent Synthesizer. It was a computer peripheral device developed by DigiScents which is shaped like a shark’s fin. It plugs into the computer’s USB port and emits appropriate scents as you surf smell-enabled Web sites. For example, if you were browsing Chanel.com, it might release perfumed scents, or a cheese-flavored scent if you were on Cheetos.com.
ReplyDeleteThe device contained a cartridge with 128 “primary odors,” which could be mixed to replicate natural and man-made odors. DigiScents had indexed thousands of common odors, which could be embedded into web pages or email.
Very interesting idea. Unfortunately, all that time-consuming work does not necessarily translate into market success. In 2006, PC World Magazine named the iSmell one of the “25 Worst Tech Products of All Time.” The article stated that, “[f]ew products literally stink, but this one did--or at least it would have, had it progressed beyond the prototype stage.”
A classic failed innovation is the Electronic Shelf Labels (ESL) introduced about 10 years ago. The ESL is a tiny LCD label that replaces the printed price label on the edge of the shelf. These can often be driven wirelessly from a central database of prices such as that used at point of sale.
ReplyDeleteThe failure of the ESL is particularly interesting because it had proven benefits including reduced labor costs of changing prices and could also be used as small displays to attract the shopper and provide product information.
Its failure is perhaps because innovators overestimated the limits of their costs constraint. ESL's are still not in broad use due to their cost and infrastructure requirements.
Also tests showed they are hard to read, especially on bottom shelves, by some shoppers which automatically placed senior citizens at a disadvantage and could prove to be a PR nightmare for companies.
As a huge Red Bull fan, I have to say that one of the biggest innovation flops of the last 15 years was the Cocaine Energy Drink. The labeling, itself, sealed the product's fate long before the FDA did.
ReplyDeleteApparently, the product's producers thought that it was a good idea to introduce "illegal marketing" as an innovation tactic in the energy drink industry. The producers did so by marketing the drink as "an alternative to street drugs." This just seems like a no-brainer.
The energy drink, Cocaine, failed because the FDA has very strict standards, and very little sense of humor. However, it has been reported that this product remains available outside of the U.S.
While I don't think that this specific mode of failure is very common, I am sure that the FDA has and does serve as a high barrier to entry for many food, beverage, and pharmaceutical innovations.
Although this may have been a short-term success (a one-hot wonder, if you will!), I think of hypercolor shirts as a failed innovation. These were shirts sold exclusively by the Generra company which changed color in a tie dye-like pattern in reaction to changes in temperature. Initially, the company struggled because their suppliers could not produce enough of the product and damages easily occurred in the washing machine. Mismanagement and fading demand eventually lead to bankruptcy. With such a trendy, "cool" product, I would imagine that failure because of fading demand often occurred. Such a product seems like it would be quickly adopted by people looking for a fun and unique product, but the quality of the product and fact that it was probably purchased most for children or teenagers, who could often not buy for themselves, most likely did not help. It also seems that a problem might have been that most people would not want to purchase more than one Hypercolor shirt, which limited their sales. I think the real failure of this product was that it just didn't have the quality or usefulness to hold consumers' attention for long-term success.
ReplyDelete